It's a clean source of energy using fuel that can easily be extracted from sea water, and it isn't owned by Saudi Arabia. We're talking about fusion - and a multinational project led by British researchers that aims to use high-powered lasers to produce nuclear fusion, the same physical reaction powering the sun. If they succeed, they could solve the approaching world energy crisis without destroying the environment.

Although the team admits a commercial fusion reactor is still decades away, it believes using lasers to spark fusion shows great promise. The EU has agreed to fund the setup costs for a seven-year research project called HiPER (High Powered laser Energy Research) to build a working demonstration reactor. But preparing for that stage - requiring the collaboration of 11 nations including Germany, France, Canada and Russia - is expected to cost more than €50m (£35m). Building the reactor itself will cost more than €500m.

Money machine

Why such investment? Because if we can control a fusion generator, it will be self-powering, offering abundant excess energy (to convert in turn to electricity) from virtually unlimited fuel. On top of this, its waste products won't contribute to climate change or pose the long-term waste storage problem that fission - our present nuclear generation system - poses. And we desperately need new electricity sources.

But fusion is infamous for its grand claims, massive grant proposals and, so far, limited success. Physicists joke that they've been saying fusion power is 40 years away for the past 40 years. So far it's only been used in the H-bombs exploded in tests, but that was uncontrolled.

Up to now, most attention has been on so-called magnetic fusion (see panel), in which a powerful magnetic jacket brings two different isotopes of hydrogen at enormously high temperatures close enough to fuse. That releases huge amounts of energy. It's been done - but no reactor has been built large enough to generate more energy than is put in via the magnets.

From the lab to reality

The HiPER team knows its approach can work. US experiments with underground nuclear explosions in the 1980s showed if you deliver enough energy to a pellet of hydrogen, fusion will occur. Laser fusion just needs to replicate that in the lab, using a high-powered laser, not a bomb.

A huge US military experiment at Livermore in California called the National Ignition Facility aims to do this in the next two years. Once done, the HiPER team wants to leapfrog the American effort. "This is how to take it from a scientific demonstration to a commercial reality," says Professor Mike Dunne, director of the UK's Central Laser Facility (CLF) in Oxfordshire and an instigator of the HiPER project.

Laser fusion involves some mind-numbing science. CLF's laser, called Vulcan, is the most powerful laser in the world: it can focus 500 joules of energy (about the same required to lift 50 apples by 10m) into a laser burst just 40 femtoseconds (40 x 10-15) long - equivalent to one second in a million years. During that period, it's applying 10,000 times more energy than the National Grid generates.

HiPER would use an even more powerful laser to set off a fusion reaction. The idea is to fire the laser at pellets of hydrogen that contain a mixture of the isotopes tritium and deuterium (which have two and one neutrons respectively). The intense power creates huge pressure - equivalent to 10 aircraft carriers resting on your thumb, claims Dunne - making the pellet implode until it has 20 times the density of lead, and the hydrogen nuclei fuse to form helium and release energy. Harder still, the laser must be fired five times per second, aimed at pellets being released at precisely the same rate. The engineering challenge is immense.

In principle, fusion is much safer than its cousin nuclear fission. Unlike fission, which tears apart atomic nuclei, only low-level radioactive material is left over - no more dangerous than hospital waste. And best of all, a runaway chain reaction like the one that caused the Chernobyl meltdown is simply impossible. "At any given point in time there is not much energy in a pellet of fuel; the worst that can happen is it doesn't work," Dunne says.

The other plus is that the raw materials for fusion are cheap and easily obtainable. There is an almost limitless supply of deuterium in sea water, and tritium is a by-product of the fusion reactor itself.

Crossing the finishing line

So will magnetic or laser get there first? That depends on who you talk to. Dunne is convinced that the ability to solve problems in parallel gives laser fusion a distinct edge; unlike magnetic fusion, progress does not depend on the whole machine being up and running.

Others are sceptical. "Laser fusion could achieve ignition before magnetic confinement fusion, but there's a big difference between [that and] achieving ignition in a magnetic machine because it is a continuous operation," said Duarte Borba who works at Jet, an experimental magnetic fusion reactor on the same Oxfordshire site. "You can implode one pellet, but then you need to achieve the repetition rate."

At the moment high-powered lasers need a few minutes to recharge between firing; in a laser fusion reactor they'll need to fire five times a second. What's more, they're typically 2% efficient, so this will need to improve by a factor of 10 if fusion is to be a realistic possibility.

But Dunne is sure of one thing: laser fusion is out of the realm of "whacky physics", and firmly in the engineering domain. And though the results of his vision are decades away, he's adamant the world must invest in fusion power now to secure energy for generations to come. In Dunne's words, "No other would meet the long-term needs of our civilisation."

· This article was amended on Monday December 10 2007. Tritium and deuterium have two and one neutrons respectively, rather than three and two, as we said in the article above. This has been corrected.